The importance of tracking palm oil

KANSAS CITY — Deforestation worries have some consumers and retailers, especially those in Europe, viewing palm oil negatively on ingredient lists, and in some cases even wanting the ingredient eliminated. Proving that the specific palm oil in a product is not associated with deforestation seems like a reasonable strategy for palm oil stakeholders and food companies, but complex supply chains involving small holder farmers and disagreements over how to achieve sustainable palm oil complicate matters. Traceability systems no doubt will prove critical in finding answers.

Unilever, PepsiCo, Inc., the Kellogg Co., Nestle S.A. and Mars, Inc. are some of the food companies with policies in place to buy only from suppliers that source sustainable palm oil.

A recent example of a company avoiding palm oil came from Iceland Foods Ltd., a leader in frozen foods with more than 900 stores in the United Kingdom. The company said in April it planned to stop using palm oil as an ingredient in all its private label food by the end of the year. Iceland pointed to a July 19, 2017, blog post from World Resources Institute, a global research organization, saying palm oil plantations have contributed to a forest loss of nearly 1.6 million hectares (4 million acres) in Indonesia.

“Until Iceland can guarantee palm oil is not causing rainforest destruction, we are simply saying no to palm oil,” said Richard Walker, managing director of Iceland. “We don’t believe there is such a thing as guaranteed sustainable palm oil available in the mass market. So we are giving consumers a choice to say no to palm oil for the first time.”

“We fully share Iceland’s concerns about the environmental impact of palm oil, but we do not agree with the solutions they are adopting,” said Darrel Webber, chief executive officer of the R.S.P.O. “Before getting rid of palm oil, we should ask ourselves: What is the impact of the alternatives? We should let consumers know that palm trees produce 4 to 10 times more oil per hectare than any other oil crop. Therefore, eliminating palm oil might lead to the use of more land with higher risks of deforestation.”

The Roundtable on Sustainable Palm Oil was founded in 2004. The not-for-profit organization unites stakeholders from the seven sectors of the palm oil industry: oil palm producers, processors or traders, consumer goods manufacturers, retailers, banks/investors, and environmental and social non-governmental organizations (N.G.O.s). The R.S.P.O. seeks to develop and implement global standards for sustainable palm oil. It uses specific criteria to certify palm oil as sustainable, helping to reduce the negative impacts of palm oil cultivation on the environment and communities.

Not every member shares the same opinions as the R.S.P.O. On June 27 the organization suspended the membership of Nestle, S.A., Vevey, Switzerland, saying the company had not submitted an annual communication on progress (A.C.O.P.) report for 2016, and the report submitted in 2017 did not include a time-bound plan. Nestle responded that it still wanted to achieve 100% responsibly sourced palm oil by 2020. The company, however, viewed R.S.P.O. certification as one tool, but not the only tool.

The R.S.P.O. on July 16 reinstated Nestle’s membership following the submission of the company’s plan to achieve 100% R.S.P.O.-certified sustainable palm oil by 2023.

“Nestle supports R.S.P.O.’s role in driving industrywide change and appreciates its decision following the submission of our action plan, which focuses on increasing traceability primarily through segregated R.S.P.O. palm oil,” said Benjamin Ware, global head of responsible sourcing for Nestle. “This builds on Nestle’s ongoing activities to achieve a traceable and responsibly sourced palm oil supply chain.”

A world without palm oil might be worse for the environment, according to the report “Palm Oil and Biodiversity” from the International Union for Conservation of Nature, Gland, Switzerland. The report found palm oil is damaging global biodiversity with 193 species assessed as threatened on the I.U.C.N.’s “red list.” The species include orangutans, gibbons and tigers.

Still, given other oil crops require, pound for pound, up to nine times more land to produce than palm oil, palm oil replacements could increase the total land area used for vegetable oil production to meet global demand significantly, according to the report.

“Half of the world’s population uses palm oil in food, and if we ban or boycott it, other more land-hungry oils will likely take its place,” said Inger Andersen, director general of the I.U.C.N. “Palm oil is here to stay, and we urgently need concerted action to make palm oil production more sustainable, ensuring that all parties — governments, producers and the supply chain — honor their sustainability commitments.”

A study from Imperial College London, which appeared online May 23 in Global Environmental Change, addressed the challenges in eliminating deforestation from the palm oil supply. Oil palm plantations replaced 2.7 million hectares of tropical forest in Malaysia and Indonesia between 1990 and 2005, according to the report.

“Deforestation-free palm oil is possible, but our study found it is very challenging for companies to guarantee at present,” said Joss Lyons-White, lead author of the study and a Ph.D. student in the Department of Life Sciences at Imperial College London. “For example, supply chains are so complex that tracing palm oil back to source is very difficult. Lots of trade may occur between different parties before manufacturing, where the palm oil is used in many different products for different purposes. This makes it hard to know exactly where the original oil was from and whether it was linked to deforestation or not.

“However, simply banning palm oil is unlikely to be the answer. Instead, we need to find ways to ensure commitments can be implemented more effectively.”

“The mills’ third-party suppliers are often remotely located and sell their fruits to a network of middle men,” she said. “As we work to improve traceability, we have to overcome a set of challenges such as the absence of public mapping, the lack of supply chain records, commercial sensitivity and the lack of incentive for the supply chain to provide the information.”

Ninety-six per cent of Cargill’s supply is traceable to the mill while 55% is traceable to the plantation, she said. All concession maps of Cargill-owned plantations are available through Global Forest Watch, an open-source web application to monitor global forests in near real-time. Several supplier maps also are available.

“We recognize the value of concession maps for transparency and monitoring,” Ms. Lavialle-Piot said. “However, further alignment is needed across the supply chain on which supply chain actor should collect and hold on to such data. At the moment, we believe mills are best suited for this role as their involvement will be key to resolving non-compliances at the plantation level. We are now reviewing how this approach can be done by providing mills with the necessary technical and engagement tools.”